Only typed answer 3. Kal Tech Engineering Systems is considering buying a CNC machining center for itsoperation in Tennessee. The net benefits in the first year is estimated to be $40,000 andincreasing at the rate $5,000 for the next four years and stays at the same level as that of year 5for the next 5 years. If MARR is 8%, determine the amount of money that the company caninvest justifying on this machining center. A salvage value of 20% of the initial cost isreasonable to assume at the end of year 10.A) $396,357B) $416,182C) $411,202D) $399,500

Salvage value (SV) is the computed value of an asset after its useful life is over and, thus, cannot…

3. Kal Tech Engineering Systems is considering buying a CNC machining center for its operation in Tennessee. The net benefits in the first year is estimated to be $40,000 and increasing at the rate $5,000 for the next four years and stays at the same level as that of yea for the next 5 years. If MARR is 8%, determine the amount of money that the company can invest justifying on this machining center. A salvage value of 20% of the initial cost is reasonable to assume at the end of year 10. A) $396,357 B) $416,182 C) $411,202 D) $399,500

3. Kal Tech Engineering Systems is considering buying a CNC machining center for its operation in Tennessee. The net benefits in the first year is estimated to be $40,000 and increasing at the rate $5,000 for the next four years and stays at the same level as that of yea for the next 5 years. If MARR is 8%, determine the amount of money that the company can invest justifying on this machining center. A salvage value of 20% of the initial cost is reasonable to assume at the end of year 10. A) $396,357 B) $416,182 C) $411,202 D) $399,500

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Only typed answer

3. Kal Tech Engineering Systems is considering buying a CNC machining center for its
operation in Tennessee. The net benefits in the first year is estimated to be $40,000 and
increasing at the rate $5,000 for the next four years and stays at the same level as that of year 5
for the next 5 years. If MARR is 8%, determine the amount of money that the company can
invest justifying on this machining center. A salvage value of 20% of the initial cost is
reasonable to assume at the end of year 10.
A) $396,357
B) $416,182
C) $411,202
D) $399,500

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